The noise is deafening as three enormous electrodes 65 cm in diameter are thrust into an electric furnace to melt down scrap iron, nickel and chrome at 1,700 degrees Celsius. Some 140 tons of melted iron is simmering in the furnace. This is the Zhangjiagang Pohang Stainless Steel plant in Jiangsu Province in China, which opened a new chapter in Korea 's 40-year steel industry history.
Zhangjiagang Pohang Stainless Steel is the first overseas integrated steel mill built by a Korean steel maker. It is also the first integrated steel mill established in China by a foreigner. POSCO on Wednesday afternoon marked the completion of the 600,000-ton annual capacity steel mill with POSCO chairman Lee Ku-taek and Secretary of Suzhou Municipal Party Committee Wang Rong among some 1,100 guests at the ceremony.
POSCO finally completed construction of the one-stop steel mill that handles the entire process from smelting iron to producing finished product after building a cold-rolled steel plant with 200,000 tons of production capacity there in 1997. It has invested US$1 billion in the project, the largest of its overseas investments. For POSCO, the completion of the Chinese plant means more than advancing into an overseas market, since the steel maker bears the scar of Korea 's humiliating history of Japanese colonial rule. POSCO was established with $73.7 million, part of funds Korea was paid by Japan under the 1965 Korea-Japan treaty in which the Park Chung-hee government accepted financial compensation from Japan for use in economic development projects. All the money spent on building the first steel mill in Pohang in 1968 came from Japan. But 38 years later, POSCO has built a stainless plant in China with 100 percent of its own technology.
China is the new battlefield of global steel makers. The world 's largest and second largest steel makers Mittal Steel and Arcelor have bought stakes in Chinese steel companies, and with the integrated mill POSCO has secured a bridgehead for the Chinese market. In terms of production capacity, POSCO is now the world 's third largest steel maker capable of turning out 2.6 million tons of steel a year, following China 's Taiyuan Iron and Steel (3 million tons) and Germany 's ThyssenKrupp Stahl (2.82 million). POSCO will use the Chinese plant as an overseas production base along with its plant in India, which will go into operation in 2010.
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